Research firm K33 has argued that Strategy Inc. (MSTR) may have made a costly misstep by financing its bitcoin purchases with preferred stock. The firm estimates that Strategy's use of STRC preferred stock has added $725 million to its annual dividend bill, despite helping it acquire nearly 100,000 BTC earlier this year.
K33 calculated that if Strategy had avoided using STRC preferred stock for financing, it would have held 843,303 BTC on Oct. 12, compared to its actual holding of 848,250 BTC. The alternative balance was calculated by removing the roughly $7.5 billion raised through STRC in the first half of 2026 and assuming that the funds earmarked for the dollar reserve and STRC buybacks had instead been used to purchase BTC.
K33's report questioned the efficiency of the preferred shares model, with Head of Research Vetle Lunde writing, "Was the pref model a mistake? We believe the answer to that question is yes." The firm noted that the preferred shares helped Strategy acquire BTC without issuing more MSTR shares but came with significant dividend payments.
The additional annual dividend costs, estimated at $725 million, could erase the 4,947 BTC difference between Strategy's holdings and K33's hypothetical balance in about seven months. While Strategy's dollar reserve provides some protection, K33 argued that holding cash for dividends is less efficient than issuing common stock for future BTC purchases.